capitalism

Meaning: Capitalism is an economic system in which individuals or firms privately own the means of production (factories, land, capital) and produce goods for sale in markets to earn profit. Prices and wages are set largely by supply, demand, and competition rather than by a central planner. Real economies are usually mixed, with some regulation and public services.

On the MCAT: Passages link capitalism to social class and inequality. In Marx's conflict-theory account, it divides society into the bourgeoisie, who own the means of production, and the proletariat, who sell their labor for wages. Owners profit from surplus value, which Marx expected to produce class conflict, alienation, and eventually class consciousness. Weber tied the rise of capitalism to the Protestant ethic and rationalization. Expect questions that compare it with socialism, where the means of production are collectively or state owned, or that ask how globalization or concentrated wealth affects stratification.

Common confusion: Capitalism is an economic system, not a type of government; it can coexist with democratic or authoritarian states. Marx's critique is one perspective, not the definition: functionalists stress how markets allocate labor and reward skill, while conflict theorists stress exploitation and unequal power.